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The Am Law Litigation Daily: Feb. 10, 2009

Posted by Andrew Longstreth

IP
Obama Poster Case Is Rematch for Ex-Bingham Partner Falzone and O'Melveny's Cendali
When
an artist creates an iconic poster using a photograph taken by someone
else, who owns the work? Shepard Fairey, the artist and guerilla
marketer who designed the ubiquitous, two-toned "Hope" poster of President Barack Obama, has an answer: the artist. On Monday, Fairey sued The Associated Press
in Manhattan federal district court, seeking a declaratory judgment
that his use of an Obama photograph taken by AP photojournalist Mannie
Garcia falls within fair use boundaries.

On a side note, Fairey was arrested Friday in Boston
on his way to an opening party for a retrospective of his work. Not for
copyright violations, though: He had two outstanding warrants for cases
involving illicit posting of street art featuring Andre the Giant and
the word "obey." Jeffrey Wiesner of Boston's Stern Shapiro Weissberg
& Garin is representing Fairey in the criminal case.

No seismic shocks will come from the documents. The best details,
including the names of the parties, have been redacted, reports
Reisinger. But White & Case partner J. Mark Gidley, who negotiated
the FOIA settlement, told Reisinger that antitrust lawyers can glean
good information from the agreements, which he said "show deviations
from the model amnesty letter in terms of privilege waivers and
coverage of subsidiaries."

Other antitrust attorneys, however, wonder if the White & Case FOIA
suit may backfire on practitioners. Jones Day partner John Majoras told
Reisinger he worries that the release of the agreements may end up
stifling prosecutorial discretion. "If DOJ now says, 'We're just using
the model letter,' then that's unfortunate for a company," he said.

Appellate / Product Liability / Mass Torts
Should Chief Justice (and Pfizer Shareholder) John Roberts Recuse Himself in Wyeth Preemption Case?
While we anxiously wait for a decision from the Supreme Court in the biggest business case of the term, Wyeth v. Levine, Tony Mauro of Legal Times poses an interesting question: Should Chief Justice John Roberts, Jr., recuse himself from deliberations? After all, Roberts owns stock in Pfizer, which recently agreed to buy Wyeth for $68 billion.

Roberts has stepped aside in previous Pfizer cases, according to Mauro.
But the Court heard arguments in Levine back in November, and the chief
justice may have made up his mind before the Pfizer acquisition was
announced. Moreover, Pfizer's Wyeth deal won't be completed until July
31 at the earliest, according to a recent letter submitted by Wyeth's
lawyer, Seth Waxman of Wilmer Cutler Pickering Hale and Dorr. In that
letter (available here,
via the Drug and Device Law blog), Waxman said that the proposed merger
did not require Wyeth to update the corporate disclosure statement it
made to the Court last year.

Mauro speculates that Roberts could shed his Pfizer stock to avoid the
recusal issue. Or he could stay on the case. "Either way," Mauro
writes, "it will be an interesting test of whether news of an
acquisition--even before it occurs--will affect justices' recusal
practices."

Securities
UBS and the Foreign Plaintiffs: An 'F-Cubed' Class Action Story
The
Litigation Daily admits to an unaccountable (and possibly unhealthy)
fascination with the F-cubed issue in securities class actions. So
we're closely following the UBS AG case in Manhattan federal district
court, in which investors, in the wake of the bank's $48.6 billion
write-down on its mortgage-backed securities, claim that UBS issued
false and misleading statements about its risk management controls, its
exposure to risky assets, and the value of the securities on its books.
Last week the plaintiffs filed a response to UBS's motion to dismiss claims brought by foreign plaintiffs who purchased UBS shares on foreign exchanges.

In their response, lawyers for the plaintiffs argue that the foreign
plaintiffs should be included in the proposed class because, among
other things, UBS's alleged activity in the U.S. "directly caused
foreign plaintiffs' losses." They also tried to distinguish their case
from NAB, arguing that the UBS foreign plaintiffs, unlike their NAB
counterparts, did not rely exclusively "on the falsity of financial
statements prepared in [a foreign country] by a foreign issuer," they
wrote.

Securities
Kasowitz Benson Files Auction-Rate Securities Suit for American Eagle Against Citigroup
Long
live the auction-rate securities scandal! Just as state and federal
regulators appear to be wrapping up their investigations into banks
that promoted the securities as safe and liquid investments even as the
market for them had dried up, private litigation continues. The latest
entrant is American Eagle Outfitters. The apparel company filed a suit
in Pittsburgh federal district court last week against Citigroup,
alleging that the bank induced it to buy auction-rate securities when
Citigroup knew the market for them was collapsing.

American Eagle's complaint
cites internal Citigroup e-mails and memos showing that as the market
for auction-rate securities imploded in December 2007, Citigroup sought
to "offload" them to its customers, including American Eagle. According
to the suit, Citigroup allegedly made internal plans to stop supporting
the auction-rate securities market at the same time it was promoting
the securities to its customers.

American Eagle is using Kasowitz, Benson, Torres & Friedman in the
ARS suit, proving once again that this is a good time to be a
litigation boutique that's free to sue big banks.

Appellate / Sports
Watch It Live: Barry Ostrager and Maureen Mahoney to Argue America's Cup Case
As
Litigation Daily readers know, another of our unaccountable passions is
the litigation surrounding the 33rd America's Cup. (Click here and here
for our previous coverage.) On Tuesday at 2 p.m., we'll be able to
watch it unfold live. The New York Court of Appeals (the state's
highest court) is planning to Webcast oral arguments
in the case of Golden Gate Yacht Club v. Société Nautique De Genève,
which will determine the challenger of record for the next America's
Cup, scheduled for 2010.

Given the legal talent involved, it should be worth watching. Appellate
ace Maureen Mahoney of Latham & Watkins will be arguing for the
Golden Gate Yacht Club, whose BMW Oracle Racing team claims that it is
the rightful challenger for the Cup. Barry Ostrager, head of the
litigation department at Simpson Thacher & Bartlett, will be
arguing for the current holder of the Cup, Société Nautique de Genève,
whose Alinghi syndicate chose Club Nautico Espanol de Vela as the
challenger of record for the 2010 race. David Rivkin of Debevoise &
Plimpton, who represents Club Nautico Espanol, will also be allotted
time during oral arguments at the court of appeals. Right now, Ostrager
and Rivkin have the upper hand: In July the New York State Supreme
Court issued a 3-to-2 ruling in favor of SNG.

For a nice backgrounder on the fiercely fought litigation, check out this piece from Monday's International Herald Tribune.